Spotify Now With 5 Million Paying Subs; Adds Metallica

Daniel Ek, the chief executive of Spotify, came a little closer to his ambitious goal of having all the music in the world on his digital service Thursday when he announced that it now had the entire Metallica catalog available for on-demand music streaming.

Ek, the 29-year-old founder of the music service, made the announcement at a New York press conference to showcase new features designed to help its users find new music tailored to their personal taste.

Ek also disclosed that Spotify now has more than five million paying subscribers, one million of whom are in the U.S., where the four-year-old Swedish service launched just a year ago. He also disclosed that his company had paid out $500 million to artists and labels in royalties, an amount that's rapidly accelerating as the number of users continues to grow. The amount represents roughly 70% of Spotify's revenue, Ek added.

Even so, the service could be better, he conceded.

"Spotify is great when you know what you know what you want to listen to, but not so great when you don't," Ek said. He outlined a plan to solve that problem with a new page that suggests additional music, Pinterest-style, with photos and information about the artists being recommended. (see Spotify's promotional video below)

Spotify will also pull in album reviews and Songkick concert information in order to provide listeners with more "context" about why those recommendations were selected, Ek said. The features, currently in beta, will be available to all users "early next year," Ek said.

"We want to make discovery even more seamless and intuitive," he said. "How do you do that? You make it truly human, and you make it personal. We want discovery on Spotify to give users the context that's been missing."

The "human" element of Spotify's discovery strategy involves a recruiting network of celebrities and tastemakers to develop playlists as a way to "connect with their fans" while giving listeners new ideas about what to play next. Ek showed a playlist developed by Bruno Mars, adding that fans can follow artists, as well as other people in Spotify's "music graph" who share similar tastes.

In a moment suggesting that digital music had come full circle, Ek invited Metallica's Lars Ulrich and Sean Parker, formerly of Napster and now a Spotify investor, on stage with him. Metallica had sued Napster a decade ago for facilitating the distribution of pirated copies of the band's music in a high-profile battle in which both parties emerged with bruised reputations.

But in the discussion that took place on stage with Ek, Ulrich and Parker publicly buried the hatchet, with Parker saying they "were more alike than different," and Ulrich complimenting Napster as being "smart."

The words were more than gestures as the band that fought to keep its music off of peer-to-peer sites agreed to make its entire catalog spanning three decades freely available on Spotify.

After the band recently got the rights to its music back, "We wanted to see what were the best options out there" for distribution, Ulrich said. "Spotify has really solidified itself as not only the leading streaming service but pretty much the only one. We were ready to jump as soon as we took control of our own masters." In answer to an audience question, Ek insisted that Metallica is not being treated differently from any other label -- emphasizing that because the band controls its masters, it is the label and benefits accordingly.